- Heritage Foods Q1 net profit fell 37.9% to Rs 25.2 crore year-on-year
- Revenue rose 17.7% to Rs 1,338 crore, marking highest-ever quarterly revenue
- EBITDA declined 16.3% to Rs 61.8 crore with margin narrowing to 4.6%
Heritage Foods Ltd. reported a sharp decline in first-quarter profitability even as revenue hit a record high, with elevated milk procurement costs offsetting strong demand for value-added dairy products.
Consolidated net profit fell 37.9% year-on-year to Rs 25.2 crore in the quarter ended June, compared with Rs 40.6 crore a year earlier. Revenue, however, rose 17.7% to Rs 1,338 crore from Rs 1,137 crore, marking the company's highest-ever quarterly revenue. EBITDA declined 16.3% to Rs 61.8 crore, while EBITDA margin narrowed to 4.6% from 6.5% a year ago.
In a press release, the dairy company attributed the pressure on margins to persistently high milk procurement costs, saying it chose to prioritise supply continuity and farmer engagement over short-term profitability amid industry-wide milk inflation.
Heritage also completed the acquisition of the remaining 5.6% stake in Heritage Novandie Foods Ltd. (HNFL), making the business a wholly owned subsidiary as it sharpens its focus on premium, value-added dairy products.
ALSO READ: Wipro Q1 Results: Net Profit Falls 4.3%, Margins Narrow; Dividend Declared
"We are pleased to report another quarter of strong execution, with Heritage Foods delivering record quarterly revenue... while our value-added products portfolio reached an all-time high contribution of 44% of revenues," Executive Director Brahmani Nara said in a post earning remarks.
Brahmani Nara added that higher milk procurement costs temporarily affected profitability, but investments in procurement, innovation, premiumisation and distribution would support sustainable long-term growth as industry conditions normalise.
The company said its value-added products business continued to outperform, with categories such as paneer, curd, buttermilk, lassi and ice cream posting strong volume growth during the quarter.
ALSO READ: Tech Mahindra Q1 Attrition Slips To 11.8%; IT Headcount Falls Below 75,000
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.